Volatile markets react to a ‘fear of inflation’

Key takeaways

  • Weiss Multi-Strategy Advisers LLC President and CIO Jordi Visser says investors have “entered a period where we talk about volatility is much higher.”
  • Visser observes that there’s more anxiety today among investors than a few years ago, and today’s environment demands more adjustments than there used to be.
  • Visser notes there’s almost always is an imbalance between investing in energy and technology, and that it seesaws back and forth between the two.

Listen Here:

Volatility hangs like a cloud over public markets regardless if you are invested in commodities, supply chain, or crypto according to Jordi Visser, President, and CIO of Weiss Multi-Srategy Advisers LLC.

“I would say over the last three years we’ve seen a significant shift from a world that maybe was a lot more quiet from 2010 to say 2016,” Visser said.  He pointed out there is more anxiety today among investors than a few years ago.  “I say that because we had QE, we had kind of a thing where the ‘Fed put’ was there, we had low inflation, we had kind of boring growth but continuing at a slow basis and now we’ve entered a period where we talk about volatility is much higher.”

According to Visser, today’s investment environment demands more adjustments than there used to be.  Liquidity, he said, has the potential to drop very quickly, and he added a warning that the stock market may be facing one of the worst years in half a century. He does however remain upbeat major indexes will close higher than where they are today. .  Visser expects inflation to remain structurally higher than most people believe, and that the housing market has what he calls a “durable side,” meaning there won’t be a housing dropoff like we experienced in 2008.

The investment strategy at Visser’s firm, during times of volatility, includes choosing liquid investments in what Visser perceives to be today’s less certain environment.  He said there almost always is an imbalance between investing in energy and technology, and that it seesaws back and forth between the two.  He highlighted what he believes to be the current overinvestment in technology, and the underinvestment in energy that has been exacerbated by the Russia-Ukraine crisis.  He offered his take on where investors might focus outside those asset classes and said investors should consider crypto-assets like bitcoin for their portfolios. 

But, the number one factor contributing to tightening financial conditions is fear of inflation, according to Visser. “Every day that you have money sitting in cash, you are losing money because inflation is structurally higher,” he said. You can also learn more about investments that have historically done well against inflation at www.yieldstreet.com

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